Step 20 to Buying a Home: Conditional Approval On Your Loan

"Conditional approval," as it relates to your financing, means that the lender has most of the information that they need in order to fully approve your mortgage loan. Your loan officer or loan processor has turned in your file, with all of your supporting documentation, to the underwriter, and the underwriter has given you conditional approval...with certain conditions outstanding.

What are the conditions?

The conditions can vary, based on the borrower. It may be that the underwriter doesn't yet have proof that you have set up your homeowner's insurance (click here for more information on setting up your homeowner's insurance); it may be that one of the conditions is one final pull of your credit (click here for a great article on five mistakes to avoid between pre-qualification and closing that can affect your approval); it may be that the underwriter is requiring one final call to your company's HR department to verify your employment the day before closing. These are fairly common conditions.

Other conditions can be more major and stringent: it may be that you need to eliminate some debt or pay off a credit card prior to closing; it may be that the lender has not yet successfully received your tax transcripts from the IRS.

Regardless of what these conditions are, conditional approval is the minimum result that we are seeking during your Financing Contingency Period.